Draft Bill for Introduction of Regulatory Framework for Financial Benchmarks - ISDA and ASIFMA Submit Comments to Korean FSC

Oct 3, 2026

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Formal comment letter to the Financial Services Commission of the Republic of Korea regarding the draft bill on introducing a regulatory framework for financial benchmarks. ISDA and ASIFMA support establishing a robust regulatory structure aligned with the IOSCO Principles (July 2013). They request clarifications to Article 2 definitions, propose a new definition of “use,” and raise scope-related points including exemptions for central counterparties and clarification on Article 3 application. They also suggest designation of specific benchmarks under Article 4.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages7

Reading Time18 min

AccessFree to download

Article 2 (Definitions)

Requests for clarification of “User” and undefined terms

Proposal to create a new definition of “use”

Article 3 (Applicable Scope)

Central counterparties and extraterritoriality

Clarification request on when Article 3(2) applies

Article 4 (Designation and Revocation of Significant Benchmarks)

Proposal for designating specific significant benchmarks

Financial Services Commission 209, Sejong-daero, Jongno-gu Seoul Government Complex 03171 Republic of Korea [Email: mykwon12@korea.kr](Email: mykwon12@korea.kr) 30 July 2018 Dear Sirs and Madams, Draft Bill for Introduction of Regulatory Framework for Financial Benchmarks The International Swaps and Derivatives Association, Inc. ("ISDA") 1 and the Asia Securities Industry & Financial Markets Association ("ASIFMA" 2 , and together with ISDA, the"Associations" or “we”) welcome the opportunity to provide comments on the Draft Bill for Introduction of Regulatory Framework for Financial Benchmarks (the "Draft Bill") proposed by the Financial Services Commission ("FSC") on 18 June 2018. Terms not defined herein have the same meanings given to them in the Draft Bill. While our members have sought to form a consensus on the Draft Bill, there are certain issues on which individual members may have their own views. This response represents the majority view of the industry on the issues covered by the Draft Bill, and certain members may provide their comments to the FSC independently. The Associations strongly support the introduction of a regulatory framework for financial benchmarks in the Republic of Korea and consider this as an important step forward for enhancing robustness and reliance of financial benchmarks and adopting the Principles for Financial Benchmarks issued by the Board of the International Organizations of Securities Commissions in July 2013 (“IOSCO Principles”) . We would welcome further discussions with the FSC as it finalizes the Draft Bill and proposes further requirements and guidance in relation to financial benchmarks. We set out our comments in the following by reference to the Articles of the Draft Bill. 1 Since 1985, ISDA has worked to make the global derivatives markets safer and more efficient. Today, ISDA has more than 900 member institutions from 68 countries. These members comprise a broad range of derivatives market participants, including corporations, investment managers, government and supranational entities, insurance companies, energy and commodities firms, and international and regional banks. In addition to market participants, members also include key components of the derivatives market infrastructure, such as exchanges, intermediaries, clearing houses and repositories, as well as law firms, accounting firms and other service providers. Information about ISDA and its activities is available on the Association’[s website: ](s website: www.isda.org. Follow us on Twitter @ISDA)[www.isda.org](s website: www.isda.org. Follow us on Twitter @ISDA)[. Follow us on Twitter @ISDA](s website: www.isda.org. Follow us on Twitter @ISDA). 2 ASIFMA is an independent, regional trade association with over 80 member firms comprising a diverse range of leading financial institutions from both the buy and sell side, including banks, asset managers, law firms and market infrastructure service providers. Through the GFMA alliance with SIFMA in the United States and AFME in Europe, ASIFMA also provides insights on global best practices and standards to benefit the region. Article 2 (Definitions) We request that Article 2 of the Draft Bill clearly defines the following: 􀁹 In regards to “User” defined by Article 2(6), - the definition of user as defined by usage in Article 2(1)(A) would only cover entities that are financial companies as defined under Article 2(7) and thus would only cover those that are subject to inspection by the Financial Supervisory Service; - the definition of user as defined by usage in Article 2(1)(A) would only cover a party to a financial transaction or a financial instrument, and would not capture an entity that brokers such transaction or instrument; 􀁹 the definition of “financial instrument”(currently undefined); 􀁹 the definition of “financial transaction”(currently undefined); 􀁹 the definition of “financial agreement”(currently undefined) . We also p

FAQs

What position do ISDA and ASIFMA take on introducing a regulatory framework for financial benchmarks?

They strongly support introducing the framework in the Republic of Korea as an important step to enhance the robustness and reliance of financial benchmarks and to adopt the IOSCO Principles issued in July 2013.

What do ISDA and ASIFMA request regarding Article 2 of the draft bill?

They request clearer definitions, including for “User” (with coverage limitations) and for currently undefined terms such as “financial instrument,” “financial transaction,” and “financial agreement.”

What scope issues do they raise for Article 3?

They propose an explicit exemption for central counterparties that provide reference or settlement prices for CCP risk management purposes, and they request clarification on when Article 3(2) would apply.

Oct 3, 2026

Upload by Jacob